Fortune Industries (FFI) to Go Private for ~$0.61/Share
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The board of directors of Fortune Industries, Inc. (AMEX: FFI) announced that it had entered into a management buyout transaction with CEP, Inc., a holding company owned by a management-led group including Fortune Industries' Chief Executive Officer Tena Mayberry and Chief Financial Officer Randy Butler. Under the management of Mayberry and Butler for the past three years, Fortune Industries has successfully shifted its focus from a diversified holding company to a pure-play, market-leading professional employer organization (PEO) with $30 million in assets and clients located in 47 states.
The post-merger company will continue to be known as Fortune Industries, Inc., and all of its subsidiaries and divisions across the United States will continue their regular business before and after the transaction.
Under the terms of the transaction approved by the board, the majority shareholder and chairman of Fortune Industries, Carter M. Fortune, will sell to CEP all of his Series C Preferred shares, which will be converted to common stock and contributed to CEP immediately prior to the merger. Upon completion of this conversion, total outstanding common stock of the company is expected to exceed 50,000,000 shares.
Shareholders of Fortune Industries who own 501 or more shares (including CEP) will receive an equivalent number of shares in the post-merger company. Shareholders who own 500 shares or less will receive $0.61 per share when the merger closes, which represents a 22 percent premium over the 200-day moving average share price as of March 20, 2012. Senior management will become the majority shareholder of Fortune Industries, and Mr. Fortune will retain a 20 percent minority stake of CEP.
The post-merger company will continue to be known as Fortune Industries, Inc., and all of its subsidiaries and divisions across the United States will continue their regular business before and after the transaction.
Under the terms of the transaction approved by the board, the majority shareholder and chairman of Fortune Industries, Carter M. Fortune, will sell to CEP all of his Series C Preferred shares, which will be converted to common stock and contributed to CEP immediately prior to the merger. Upon completion of this conversion, total outstanding common stock of the company is expected to exceed 50,000,000 shares.
Shareholders of Fortune Industries who own 501 or more shares (including CEP) will receive an equivalent number of shares in the post-merger company. Shareholders who own 500 shares or less will receive $0.61 per share when the merger closes, which represents a 22 percent premium over the 200-day moving average share price as of March 20, 2012. Senior management will become the majority shareholder of Fortune Industries, and Mr. Fortune will retain a 20 percent minority stake of CEP.
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